Regulators and shareholders have approved Business First Bancshares Inc.’s previously announced acquisition of American Gateway Financial Corp., which will combine two Baton Rouge banks into a financial institution with $1 billion in assets and 16 locations.

The two firms are holding companies for Business First Bank and American Gateway Bank.

“This is a materially significant step for both companies,” said Jude Melville, president and chief executive officer of Business First Bank. “In an economic and regulatory environment that is increasingly challenging for community banks, we believe both of our institutions will be stronger taking on the future together — more assets under management, more geographic and industrial diversification, more opportunities for employees to grow and develop, and more earnings to invest for growth,” he said.

As of Dec. 31, the combined company had projected assets totaling about $1.05 billion, total gross loans of about $711 million and total deposits of about $867 million.

The company will operate 15 banking centers: six in East Baton Rouge Parish, three in West Baton Rouge Parish, one each in Livingston and Ascension parishes and one each in Shreveport/Bossier City, Lake Charles, Lafayette and Covington. A loan production office is in Houma.

The bank deal was first announced in July. The acquisition announcement came roughly 18 months after American Gateway emerged from a federal-and-state order to shed foreclosed properties and $35 million in problem loans.

The Federal Deposit Insurance Corp. and Louisiana Office of Financial Institutions placed American Gateway under the consent order in December 2011. The bank, like many other businesses, suffered from the impacts of the Great Recession. American Gateway had worked with customers to avoid foreclosing on several properties, but regulators wanted to accelerate the process.

Melville had said in July that, while Gateway stumbled a bit during the recession, the bank had made significant improvement since then with improvements in the economy.